All Forum Posts by: Nick C.

I don't think my tax advisor is claiming depreciation for two rental properties and I'm looking for some help from the BP community. I did a 1031 exchange in early 2022 from a single vacation rental I had into two DST's, each are 300 unit Apartment complexes offered by Capital Square. As part of the tax documents I received from Capital Square, they included cost segregation study for each property.

On Schedule E, I can see the rents received for each property along with the interest paid.  There is also a line (Line 18) for depreciation expense or depletion.  Is this where the depreciation expense should show up?  

I'm going to call my tax advisor tomorrow and ask them but I'm not confident in their explanation so I'm looking for another opinion.

Thanks in advance and I appreciate the help.

 Thanks Joe.  I wasn't aware of 721 Exchanges and appreciate the information.  That's what makes this site great; learn something new every day.

Hi Adrian,

I split my proceeds up evenly and invested in two separate apartment complexes offered by Capital Square.  They are returning 4% which given the current environment, doesn't seem great but that's what was available at the time.  I've received the monthly distributions every month on time so they are performing as expected.  Looking back, I don't know if splitting them up is something I'd do again because at some point they will be sold and in all likelihood not at the same time so I won't have all the money available at the same time unless I do something different.  

It's definitely a lot easier to cash the checks each month and not have to worry about taking care of the property and what renters are doing to it that I would need to fix.  

I was in the camp that sold.  I owned a 4br/3.5 bath cabin for 9 years and sold about a year ago.  When we purchased, I wasn't looking to be in the real estate investment space.  We wanted a vacation home that we could rent out to cover our costs.  Wound up being one of the best investments of my life but I got tired of the abuse and work the cabin required due to how renters treated my property.

I was shocked with how much we sold our cabin for and wondered how someone could make the numbers work.  I have a W-2 job and wasn't interested in self managing, especially since I had never done it before.  With the exception of '20 and '21, our cabin gross was typically in the $50's.  

Here's what our monthly expenses were in 2021

Electric - $236

Cable/Internet - $290 (Comcast are thieves)

Mortgage - $1,200 (I paid additional principal as my goal was to be paid off when I retired)

Taxes were less than $100/month

Misc - my budget was $5K per year and most years I was close to this number.  

Ultimately, I'm glad we sold though I do miss it down there and plan to return at some point but won't use it as a STR. I'm enjoying the life of passive real estate investments.

I'm really in awe of those that do this for a living and do it well.  I was inexperienced and probably did things wrong, but I learned a ton and continue to enjoy reading about everyone else's experiences.  

There were a lot of cabins that went into foreclosure after the recession.  We bought one of them in 2012.  Paid 52% of what the original owners built it for in 2007.  If they would have weathered the storm and held it, they could have sold it for more than double the original price in 2021.  

First experience with a 1031 exchange and DST. Let's see how this goes!

Sold our vacation rental and have put the proceeds into two DST offerings. Both are multi-family apartments and one has a 3.9% distribution rate and the other is 4.01%. Both were offered by Capital Square.

I'd talk to a real estate professional in the market first.  I've been a cabin owner for the last 9 years and just recently sold but from my experience, people are looking for cabins to rent and not homes.  I may be wrong but that's why I'd contact a real estate agent.  

thanks for the replies and insight.  She's in the process of moving and can't remember if she had title insurance.   The previous owners family is cooperating but it still has to go through probate.  She's closing next Wed on her new house so it's adding some additional stress to her move.  Thanks again.

I have a question for those that might know the answer or have input.

My daughter just sold her house that she's owned for about 5 years.  She bought it from an older lady whose grandson had power of attorney.  While the paper work was being processed for the sale that's in process now, it was noticed that the grandson notarized his own signature on the power of attorney document and it now has to go through probate.  Her real estate agent tried to explain it away, saying it's human error and those things happen.  

My questions are:  Is this really something that happens and you just have to deal with it?  What accountability does the title company have in this in not doing their job and finding this when it originally happened?  Is it worth my daughter's time to pursue legal action? Thanks for any input.

I was happy with it but I wasn't looking at it to generate profit.  All I wanted was for it to pay for itself.  We had a 4 BR 3.5 bath and our gross pre-covid was between $50 and $60k but we used it quite a bit.  After all expenses, we were between -3K and +3K each year. That was mostly due to how much we spent on misc. expenses.  I budgeted $5k per year for that.  Some years were over (new couch, mattresses, etc) and others it wasn't as much.

I'm doing a 1031 Exchange into a DST. With the money from the DST, we'll most likely get back into a cabin down there again in a couple years but only rent to family and friends.

Even with all the frustrations, every year I would ask myself if I would do it again and the answer was always yes.  If my cabin hadn't appreciated as much as it did, we would still own it.

Be happy to answer any other questions you have.